The Portuguese authorities have sent information to the European Commission on the recapitalization plan of Caixa Geral de Depósitos. Information, knew Observer, arrived Friday at the end of the day and is being analyzed. However, there is still no decision on the transaction.
According to the newspaper Público, the direction-General for Competition of the European Commission already have given the green light to the outline of a box recapitalization funded of State. The final solution, adds the newspaper, is “almost closed” with the General Directorate of the European Competition (DG Comp) and the European Central Bank (ECB). But still lack a formal authorization for the operation, whose viability has been identified as one of the conditions placed by the future president of public bank, Antonio Domingues.
An official source of the Commission confirmed to the Observer that is contact with the Portuguese authorities on the subject. Contacted the Ministry of Finance, which has the protection box, did not yet comment.
The sending of information by the Lisbon coincides with the announcement of the new cast of the state bank management, which will be led the former vice president of BPI. The names of Antonio Domingues team, which includes Leonor Beleza and Rui Vilar, were also known on Friday night.
The Portuguese State may carry out another capital increase in Caixa Geral de Depósitos ? The public bank needs more recapitalization – the value could reach 4,000 million euros. – But there are doubts about whether the European Commission will pass the operation, if it considers that it is a State aid
already on Monday, told TSF / DN / JN / Mad Money European Competition Commissioner, Margrethe Vestager explains under which conditions a box recapitalization could be approved in light of European rules.
As a matter of principle, a State may invest. It does not have to be necessarily help of state. If the state investing as a private investor would, well that’s great for us and, of course, is not State aid. “
In these statements, which does not refer to the case the Caixa Geral de Depósitos, the official also ensures that there is a prejudice as public investment, “we are neutral in terms of property ” and removes any political decision regarding the assessment of such operations . The only analysis that is done, he adds, is related to legal criteria.
A private investment criteria means to Brussels will have to be a profitable investment that is paid over time. It is not enough to show a profit Cash – the state bank has had losses in recent years with the exception of results that benefited from the capital gain from the sale of Loyalty. You have to remunerate adequately the capital invested by the State. – Between 8% to 10% per year is an indicator of reference for the European Commission
And to convince Brussels that the investment will be made in optical private investor, especially when the operation deletes private capital and has only public money, will probably be necessary to accelerate the cost reduction. Concerned may be more restructuring in the state bank that in recent years has reduced its size, in particular in the international area (Spain) and non-banking business with the sale of holdings and operations health and insurance.
“the only cases in which we have a role to play are obviously when taxpayers’ money is used in a way that not similar to the way a private investor would use the money” ., also stresses the commissioner of competition
If the injection of public funds is considered a State aid in Brussels, then the European banking rules are clear: bank public or private, must be the subject of a resolution . It was, moreover, what happened in the case Banif when it found that the bank’s purchase proposals involving all aid State.
The Caixa Geral de Depósitos received in 2013 a financing State 1,650 million euros , part in cash and part in convertible capital instruments, CoCos famous, worth 850 million euros. The bank has not repaid this debt with final payment term ends in 2017 and has played a very significant burden in the interest,
This need, combined with more stringent capital ratios and the demonstrated inability to return to profits – in the first quarter the bank lost 74 million euros. – push the CGD for a new capital increase, as already warned the auditor of the institution
Another matter that Portugal is discussing with the Union Europe is how to account for the recapitalization of Caixa Geral de Depósitos the Mario Centeno government wants it to be classified as a financial transaction, which would go to debt, but not to the 2015 public deficit.
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